FICO vs. VantageScore: What's the Difference?

Your credit score is in many cases the most influential factor in a lender's decision to grant you credit and at what rate. The higher the score, the less you'll pay for the use of someone else's money.

Although the most widely used credit model is the FICO (named for the score's developer, Fair Isaac Corporation), there's another score for sale--the VantageScore.

It's very important to know which one you're looking at. The more traditional FICO score can range from 350 to 850. The VantageScore, however, ranges from 501 to 990 and parallels a grading system of A to F. And these different scales can cause confusion.

Understand the basics before you purchase your credit score:

* A FICO score of 750 is considered a good credit score, which means lenders likely will view you as a good credit risk. A VantageScore of 720, however, would yield a grade of "C" (901 to 990 = A, 801 to 900 = B, and so on).

* VantageScore was launched in March 2006 and jointly developed by the three major credit reporting companies (Equifax, Experian, and TransUnion). These credit reporting companies market the VantageScore from their respective Web sites. For example, consumers can purchase a VantageScore for $7.95 at vantagescore.experian.com. Equifax, on the other hand, only sells VantageScores to businesses. Check each credit reporting company's Web site for details.

* You can buy your FICO score from Equifax or TransUnion through myFICO.com, or from the credit reporting companies' Web sites.

* If you buy your FICO score from more than one credit bureau, you might be surprised to see a different number on each one. This occurs because the data in your files at the credit bureaus may vary.

* In addition to selling the FICO score, credit reporting agencies, other credit score developers, and lenders may promote their own proprietary scores. These and other non-FICO scores tend to vary even more widely from source to source because, in addition to there being differences in the underlying data, each provider also uses a different scoring formula and scale.

* Given how entrenched FICO scores are in the credit industry, a large-scale move to VantageScore or any other scoring system probably won't happen quickly.

While it's too soon to know if VantageScore will one day give FICO competition, it's never too early to understand how you're being evaluated and how you rate.

For questions about credit scores or other credit-related issues, stop by or contact us at South Carolina Federal Credit Union. For more information about VantageScore, visit http://www.vantagescore.com/next_steps.

Copyright 2011 Credit Union National Association Inc. Information subject to change without notice. For use with members of a single credit union. All other rights reserved